The hadith you mentioned was from Abu Abdillah (pb), which refers to Imam Sadiq (not Imam Hussein) in which he says: "We are from the Quraysh and our Shias are Arabs and our enemies are Ajams." If we are considering the literal meaning of the hadith (in which the words Arab, Quraysh and Ajam have their regular meanings), one must say that both the chain and the content of the hadith are not acceptable; the chain is not accepted because some of the narrators in it are unreliable, and so is the content because it contradicts Quranic verses, many other ahadith and the intellect that all consider Taqwa and faith to be the sole criterion of superiority and reject racial discrimination. Add to the above that the prophet and his household have said: "If a hadith that is narrated from us clearly contradicts Quranic verses or indisputable Sunnah, than do not accept it."
Of course this is if the literal meaning of the words Arab and Ajam were intended, but in Arabic, the words Arab and Ajam do not always refer to certain ethnic groups, but rather point out a set of features and qualities.
These features may be exclusively found in certain ethnic groups, for example the meaning of Arab could be noble-born and full-blooded and Ajam could mean having no basis and root. In this case, if the hadith is considered authentic in terms of its chain of narrators, then the content will be acceptable. At the same time, there are many ahadith in which tribes from other ethnic groups have been greatly hailed and praised because of their faith, good deeds or perseverance and stability.
Page 164 of Sheikh Abbas Qomi's Arabic book, Safinatul Bihar, is related to the word Ajam; he has collected special ahadith related to the word Ajam in this section of the book. There was no hadith narrated from Imam Hussein in this section, but there was a hadith narrated from Aba Abdillah, which refers to Imam Sadiq. The hadith is as follows: "Dhureis Bin Malik says that I heard Imam Sadiq saying that we are from Quraysh, our Shias are Arabs and our enemies are Ajams."
In order to examine such ahadith we must consider the following points:
First: The first thing that must be checked in regard to ahadith is their chain and that all of the narrators are known and reliable. There is a man named Salamah Bin Khattab among the narrators of this hadith that the scholars of the science of rijal consider to be unreliable. In addition to this, there is a vast time gap between the narrators and it seems that some of the narrators are not mentioned, and this adds to the weakness of this hadith.
Second: The second thing is to examine the ahadith in terms of the content's compatibility with the Quran and other indisputable ahadith.
The apparent meaning of this hadith contradicts Quranic verses, many ahadith and the intellect, all of which consider taqwa and faith to be the sole criterion of superiority and reject racial discrimination. Also the prophet and his household have said: "If a hadith that is narrated from us clearly contradicts Quranic verses or indisputable Sunnah, then do not accept it."  Therefore, even if the narration was authentic, the apparent meaning of this hadith would still be unacceptable.
Third: This is if the apparent meaning of the words Arab and Ajam were intended, however, in Arabic the words Arab and Ajam do not always refer to certain ethnic groups, but rather point out a set of features and qualities.
These features are exclusively found in certain ethnic groups, for example the meaning of Arab could be noble-born and full-blooded and Ajam could mean having no basis and root. In this case, if the hadith is considered authentic in terms of its chain of narrators, then the content will be acceptable.
In other words, in order to understand the meaning of words, we must consider the circumstances of that time and how words were used with different meanings, because in any language, the meanings of words undergo change with the passing of time. In this hadith, the words Arab and Ajam which mean Arabic speaking people and non-Arabic speaking people, are also used with other meanings. For example "A'rab" means "speaking straight forward and frankly", "Al Arab" is also used with the meaning of "joy", "A'jam" refers to a person who does not speak frankly, even though he might speak Arabic and "Ajmaa' " means quadruped and any being that does not understand speech. Also, it is mentioned in a hadith in regard to the meaning of Ajam that it refers to the sheep, cow, pigeon, etc.
In this light, it is necessary to understand the precise meaning the Imam intended from among the many meanings of the words Arab and Ajam. In order to do so, we must examine other ahadith that consist of these words or ahadith that have similar meanings.
It is understood from the ahadith narrated in this connection that in this hadith Arab means stable, well-rooted, noble-born, clear and frank, and Ajam means with no root or basis, unstable or unwise. These meanings are compatible and, in a way, derived from the original meanings of these words.
The reason why the secondary meanings are compatible with the original meanings is because at that time the comparison between Arabs and Non-Arabs was brought up frequently to determine the original roots of individuals. The original Arabs would have a greater status and position compared to the other Arabs. Therefore, the Imam intended to fix the false viewpoint that believed Arabs were greater and well-rooted in comparison to Non-Arabs by stating that what truly matters is one's belief in the right religion and school of thought (and not their ethnicity). And through this phrase "We and our Shias are Arabs (and well-rooted)" he has opposed this wrong ideology.
The hadith in which he says: "We are Arab and our Shias are from us…" and the other hadith in which he says: "Who is born Muslim is Arab…" support this claim.
In this light, the word Quraysh, which is one of the well-rooted tribes among Arabs, means to be greatly stable and well-rooted and consequently the meaning of the hadith is as follows: We are the most well-rooted of people and our Shias are well-rooted and stable and our enemies are unstable.
Fourth: Moreover, there are many ahadith in which tribes from other ethnicities have been greatly hailed and praised because of their faith, good deeds or their perseverance and stability. We have mentioned a number of these ahadith below:
A: Imam Baqir stated that a group of Imam Mahdi's followers are from among the children of Ajams.
B: It is narrated from Imam Ali that he said: "He (Imam Mahdi) will return when Ajams have built a station in the Mosque of Kufah and teach the people the Quran in the very form it was revealed."
C: It is narrated that Imam Ali spoke of the Persians to the Arabs on another occasion saying: You fought against them for the sake of the Quran's revelation, but the end of the world will not come before they fight you for the sake of its interpretation and meaning. (Meaning that you will neglect its interpretation but they will abide by it.)
 The main source of this hadith is the book of Ma’ani al-Akhbar, pg. 404.
 Khu’i, Abul-Qasem, Mu’jam al-Rijal, vol. 4, pg. 9.
 (In which Arab, Ajam and Quraysh refer to certain races and tribes.)
 Hujurat, 14 " یا أَیُّهَا النَّاسُ إِنَّا خَلَقْناکُمْ مِنْ ذَکَرٍ وَ أُنْثى وَ جَعَلْناکُمْ شُعُوباً وَ قَبائِلَ لِتَعارَفُوا إِنَّ أَکْرَمَکُمْ عِنْدَ اللَّهِ أَتْقاکُمْ إِنَّ اللَّهَ عَلیمٌ خَبیرٌ. "
 قال سیدنا رسول الله (ص) أیها الناس إن ربکم واحد و إن أباکم واحد لا فضل لعربی على عجمی و لا لعجمی على عربی و لا لأحمر على أسود و لا لأسود على أحمر إلا بالتقوى قال الله تعالى إِنَّ أَکْرَمَکُمْ عِنْدَ اللَّهِ أَتْقاکُم
 (Kafi, vol. 1, p 69) " قَالَ قَالَ رَسُولُ اللَّهِ (ص) إِنَّ عَلَى کُلِّ حَقٍّ حَقِیقَةً وَ عَلَى کُلِّ صَوَابٍ نُوراً فَمَا وَافَقَ کِتَابَ اللَّهِ فَخُذُوهُ وَ مَا خَالَفَ کِتَابَ اللَّهِ فَدَعُوهُ "
 Adopted from the book of Lisan al-Arab, vol. 1, pg. 589.
 Ibid, vol. 12, pg. 386.
 Majma’ al-Bahrain, vol. 6, pg. 112.
 Ma’ani al-Akhbar, pg. 404.
 Safinat al-Bihar, vol. 2, pg. 164.
 Qurb al-Isnad, pg. 52; Bihar al-Anwar, vol. 64, pg. 174.